Too Many Psychics in 'Witch City'?

Salem, Massachusetts is famous for its modern witches and history of witch persecution. The city's unique past supports a thriving menagerie of businesses selling everything from magical charms to fortunes, but some fear the number of psychics flocking to the community north of Boston could be too many.

In 2007, the city lifted a cap on the number of psychics allowed to operate and now some believe the 'Witch City' is getting overrun.

Barbara Szafranski is a long-time psychic license holder who conducts readings at her downtown shop Angelica of the Angels. She needed no crystal ball to tell her business would take a hit when more fortunetellers hit the scene.

"It affected me 75%. I lost business because many stores opened up that were not in this field. They just opened up because they wanted to get the money from the readings," said Szafranski.

"It just becomes a bunch of gypsies. Maybe I shouldn't say that word because they might be upset by it but those people are not necessarily always qualified."

She says Salem city leaders need to do a better job controlling the number of fortunetellers and preventing charlatans from operating.

"I'm in favor of putting the cap on because there are so many psychics in the city now. When I first opened up my business 25 years ago I was just about the only one in this area and, of course, as you're seeing since then it's grown and grown and grown," said Szafranski.

Before the cap was lifted just a handful of stores offered psychic readings. Today roughly 70 people hold psychic licenses and while some license holders lament the increase others believe it's a boon for the economy and a matter of fairness.

Christian Day is a Salem warlock who owns two shops in the city, Omen and Hex. He employs psychic readers at both businesses and runs a psychic fair each year. He helped push the Salem city council to lift the cap on psychics and thinks the change offers a positive revenue stream for the area.

"I feel like it creates this sort of sparkle effect where everybody's sort of raising the bar on one another and making everything more exciting," said Day.

"As a person who believes in the power of the free market, I believe that the free market should decide whether or not there are too many psychics. If we have too many, they won't make any money and they leave. It's just like anything else," argues Day.

Laurie "Lorelei" Stathopoulos owns Crow Haven Corner, a business dubbed "Salem's first witch shop." She conducts readings in a cozy back room and believes the city council needs to keep a close eye on the growing number of psychics.

"I agree with Christian as far as the free trade but I also was one of the biggest advocates of keeping Salem quaint and small and magical and the more people we let in could hurt that name," said Stathopoulos. "Just like having a Chanel bag, you want the real thing. You don't want the run-of-the-mill or a knock off bag."

The Licensing Board requires a one year residency and a $50 fee before issuing a psychic license. It's a way to ensure commitment to the community.

City Councilor Joan Lovely says the city lifted the cap because the city solicitor wasn't sure that keeping it in place was constitutional. Since then, handling the influx of people seeking psychic licenses has proven to be time-consuming.

"I guess the board is just concerned about the number since we opened it up and they just want to make sure that it's workable, that it's manageable for them," said Lovely.

Day believes the revenue raised by the fee and the new businesses outweighs any administrative burden and says competition is good for the industry.

"What we want to encourage is that quality people come and in my opinion the free market encourages quality. If you cap the number of licenses and keep those people with licenses protected you essentially guarantee that people with lesser talent are protected," argues Day.

"It is rather interesting to me that people expect government to protect their business. Your ingenuity should protect your business. Your talent should protect your business. Your aggressiveness to succeed will protect your business," said Day.

Molly Line joined Fox News Channel as a Boston-based correspondent in January 2006.